Covid-19 has ravaged economies across the world and Scotland is no exemption.
During April a quarter of Scottish businesses shut down and many others were forced to dramatically reduce their output. Most economists indicate that a quick bounceback is unlikely, particularly since the futures of key sectors such as tourism and hospitality look increasingly precarious.
Covid-19 has laid bare what many of us already knew. That instead of heeding the painful lessons of the 2008 economic crash we have reverted to a state of rentier capitalism. A sharp schism has formed throughout our society between those with the wealth to buy their assets and those who are forced to rent. A decade of austerity has pushed communities closer to the brink by defunding vital services and as a result household debt has soared.
In many ways, Covid-19 has created a fork in the road for the Scottish Government. A dramatic economic recovery plan is required, technocratic tweaks and balances will no longer cut the mustard. The question is whether the Government will try to stick dogmatically to free-market economics. An ideology which has led to multiple economic, social and environmental catastrophes. Or whether it will choose to be bold and commit to a new course.
Fortunately, one organisation has been channelling their energy into clearing such a path through the economic hinterlands. Common Weal is a Think and Do Tank based in Glasgow who develops policies which promote social and economic equality. This week they released a revolutionary paper outlining a new economic framework and detailed action plan which they have titled ‘Resilience Economics’.
Unlike neoliberalism, Resilience Economics does not set GDP growth as its raison d’etre. Similarly, unfettered profit maximisation is roughly picked up from its golden pedestal and thrown out the window. Instead, Resilience Economics relies on a broad range of economic theories each of which brings something fresh and relevant to the conversation. The vision presented is a road map of how an economy can be managed to ensure it provides a meaningful and secure existence to all of Scotland’s citizens without compromising the environment.
The paper proposes thirteen overarching policy goals which if achieved will ensure that Scotland becomes resilient to current and future challenges. They include:
- Scotland must create an economy which is more productive and useful and which reduces low-pay and insecure jobs with high-pay, secure ones.
- Scotland should do much more, within the law, to prioritise domestic productive business over profit-exporting corporations
- Scotland must reduce the debt burden which undermines household and business resilience
- Scotland should make banking safe and boring again so that a trustworthy and resilient banking sector can be relied on to provide crucial services
- Scotland should reduce the volume of corporate retail and transition away from a reliance on the low-pay service sector
- Scotland must begin a major programme of green reindustrialisation
- Scotland’s recovery must be driven in part by land-based industries and so land reform will be crucial
- Scotland must adopt an ‘entrepreneurial state’ model working to a national industrial strategy, but it must also be decentralised
- Scotland must substantially increase the proportion of its economy which is domestically owned.
- Scotland must use the economic rebuilding post virus to move rapidly to start a radical Green New Deal
- Nothing in Scotland’s recovery and its subsequent reindustrialisation process must be considered if it does not decrease economic inequality and poverty.
- Scotland must focus scarce resources to maximise their best, long-term returns
- Scotland must treat all its people firstly as creative human beings, not as consumer or production units
The roadmap to transform Scotland into a resilient economy is complex, especially when uncertainties remain about the second wave of Covid-19. Bold action is required to bring small domestic businesses in hard-hit sectors back from the brink. Common Weal has suggested innovative ways that the state could achieve this. Such as targeted voucher schemes to support small locally owned businesses in the tourism and hospitality sectors.
What is clear from this paper is that the state must take a more active and entrepreneurial role in nearly all areas of the economy. It will be expected to lead through a process of creative adaptation, providing clear signals on how the economy should be restructured so that it can meet the needs of the people and the environment.
By sticking with the eleven guiding principles and the proposals in the Resilience Economics paper Scotland would be a true world leader, uniting high-class manufacturing, environmental standards and compassionate social justice politics.
I would urge you all to devote a bit of time to read this paper, not only does it make public procurement reform sound like the start of a revolution, but it is also the most hopeful document I have read this decade.
It feels like we stand at a monumentally important moment. Throwing our collective weight behind organisations like Common Weal and the Just and Green Recovery for Scotland campaign may be the best hope we have of reshaping our future.